NZ life insurance glossary
Definitions of the terms used across NZ life, trauma, income protection and TPD policy documents. Editorial reference — not personalised financial advice.
Accelerated trauma
A trauma cover bundled with life cover, where a paid trauma claim reduces the life sum insured.
Accidental death cover
Cover that pays out only if the insured dies as the result of an accident.
Any occupation definition (TPD)
A TPD definition that pays out only if you cannot do any job you are reasonably suited to.
Beneficiary
The person(s) you nominate to receive the death benefit.
Cover term
The length of time cover stays in force — either a fixed term, or to a defined age, or whole-of-life.
Death benefit
The lump sum paid by a life policy when the insured dies (subject to wording and exclusions).
Exclusion
A specific event or condition the policy will not pay out for.
Financial Advice Provider (FAP)
A business licensed by the FMA to give regulated financial advice to retail clients in NZ.
Financial Markets Authority (FMA)
The NZ regulator that licenses and monitors financial-services providers, including life insurers and FAPs.
Financial Services Complaints Limited (FSCL)
A free external dispute-resolution scheme for complaints against participating NZ financial-services firms.
Future insurability
A policy option letting you increase cover at defined life events without fresh medical underwriting.
Income protection
A policy that pays a monthly benefit if illness or injury stops you working.
Indexation
Annual increase in your sum insured (and premium) to keep cover in line with inflation.
Insurance (Prudential Supervision) Act 2010 (IPSA)
The NZ Act under which all licensed insurers (including life insurers) are prudentially regulated.
Insurance & Financial Services Ombudsman (IFSO)
A free external dispute-resolution scheme for complaints against participating NZ insurers and financial-services firms.
Level premium
A premium that stays at the same rate as you age (until a defined cap age or sum-insured event).
Non-disclosure
Failing to disclose material information about your health, history, or occupation at application.
Own occupation definition (TPD)
A TPD definition that pays out if you can no longer perform your specific job.
Pre-existing condition
A health condition you had (or had symptoms of, or sought treatment for) before the policy started.
Premium
The amount you pay the insurer (monthly, fortnightly, or annually) to keep cover in force.
Premium loading
An extra charge added to your premium because underwriting identified higher-than-standard risk.
Regulated financial advice
Personalised advice given to a retail client, regulated under the Financial Markets Conduct Act 2013 + FSLAA 2019.
Reserve Bank of New Zealand (RBNZ)
The NZ prudential regulator for life insurers — sets the solvency rules and publishes financial-strength ratings.
Solvency standard
The minimum capital ratio NZ-licensed life insurers must maintain under RBNZ rules.
Stand-alone trauma
A trauma policy independent of life cover — a paid trauma claim does not reduce the life benefit.
Stepped premium
A premium that recalculates each year and rises with your age.
Suicide exclusion period
A period at the start of a life policy during which a claim by suicide is not paid (premium refunded instead).
Sum insured
The lump-sum cover amount your policy pays on a valid claim.
Terminal illness advance
An option to receive the life sum insured early on terminal diagnosis (typically <12 months prognosis).
Total and Permanent Disability (TPD) cover
A lump sum paid if you are permanently unable to work due to illness or injury.
Trauma cover
A lump sum paid on diagnosis of one of the defined trauma conditions (e.g. major cancer, heart attack, stroke).
Underwriting
The insurer’s assessment of your application before the policy is issued.
Waiting period
The period at the start of a claim before benefits begin to pay (income protection) or the initial policy period before cover applies (life / trauma).
Not personalised financial advice. Definitions are editorial framings of how each term is generally used in NZ life cover. Specific policy wordings may define terms differently — always read the wording attached to your policy.